Business Archives - Page 6 of 34 - Tim McCready

Capital Markets: Hong Kong poised to make strong recovery

May 25, 2023

Since its borders reopened in January, Hong Kong has been focused on re-establishing itself as a prominent business hub and a connector between mainland China and the global financial community.

This was evident at Hong Kong’s Asian Financial Forum, held in person early this year, where it was noted that despite the need for Hong Kong to navigate macro-economic challenges on many fronts — including rising interest rates, the adjustment in the local housing market, and the global economic slowdown — its strong institutional frameworks and substantial capital and liquidity buffers have allowed the financial system to remain resilient and continue to operate smoothly through multiple shocks over the past few years.

Almost 70 per cent of attendees polled expressed a “neutral to positive” sentiment towards the global economic outlook. The upbeat attitude was likely bolstered by the border reopening just days before the conference.

Indeed, the International Monetary Fund (IMF) recently reported that Hong Kong’s recent lifting of Covid-related restrictions, including border controls that lasted nearly 1000 days, has helped to normalise its economic activity.

The resumption of cross-border travel has seen services exports expand significantly, and domestic private consumption has experienced considerable growth as pandemic restrictions have eased. The IMF projects a real GDP growth for Hong Kong of 3.5 per cent in 2023 and 3.1 per cent in 2024.

Hong Kong’s isolation from the rest of the world has created space for competition from Singapore to become Asia’s top financial centre. Singapore was one of the first countries in Asia to reopen its borders during the pandemic.

As well as losing its position as the region’s busiest airport to Singapore, Hong Kong was also overtaken in the Global Financial Centres Index, with Singapore becoming the third-largest financial centre, after New York and London.

But Hong Kong remains well ahead of Singapore in capital markets activity, with stock market turnover and market capitalisation more than seven times larger. At the end of December 2022, its stock market capitalisation reached US$4.6 trillion ($7.3 trillion) — around 13 times its GDP.

This year’s Asian Financial Forum placed a significant focus on Hong Kong’s efforts to stay at the forefront of the evolving global economic landscape in an effort to expand beyond traditional financial growth.

It is establishing itself as a leading global hub for green finance, reflected in the US$80.5 billion ($128 billion) in green and sustainable debts it arranged or issued last year, along with the world’s first government-tokenised green bonds, trialled last month, worth US$102 million ($162 million).

It is also courting fintech and greentech companies, with growing funding sources and regulatory reforms that allow new economy firms to list on its stock market and access capital.

Hong Kong’s position as a global financial hub remains strong, handling over 70 per cent of the world’s renminbi settlements. By focusing on emerging areas of financial services and leveraging its status as a financial gateway to China, operating unencumbered by the mainland’s more restrictive regulations, there is optimism in the sector about its prospects.

· Tim McCready was a guest of the Asian Financial Forum.

Capital Markets: Reshaping the financial markets for the next generation

May 25, 2023

Two emerging leaders in the capital markets speak to the Herald about their careers, the challenges women face in the sector, and what can be done to promote greater diversity and inclusivity.

Daniela Bossard

Daniela Bossard is an investment director at Rangatira Investments, a leading long-term investor in private New Zealand businesses.

In her role, she is responsible for assessing new investment opportunities and ensuring they align with Rangatira Investment’s core investment principles.

This involves identifying and evaluating potential investments, conducting due diligence, and presenting investment recommendations to the board. Additionally, Bossard works closely with existing portfolio companies to help them achieve their growth objectives. As a long-term investor, Rangatira Investment takes a partnership approach with its portfolio companies, working collaboratively to achieve its shared objectives.

She says it is a rewarding position that allows her to make a meaningful contribution to the growth and success of New Zealand businesses.

Bossard’s interest in the financial markets sector started at a young age, which led her to study finance and economics at the University of Auckland.

She started her career in investment banking, working closely with founders, senior management teams, and boards on potential acquisitions and divestments.

Bossard hopes to contribute meaningfully to investment outcomes that benefit Rangatira’s shareholder base. She is proud that around 60 per cent of its shareholders are charities or charitable trusts, allowing her to make a positive impact on New Zealand’s wider communities while leveraging her core skill set.

Bossard says one of the biggest challenges facing women in the sector is a lack of visibility and representation. She explains that this has a twofold effect: firstly, younger women have limited access to female role models, making it harder for them to envision themselves in leadership positions. Secondly, when there are so few women in leadership roles, they may be seen as tokens, putting undue pressure on them to be perfect and potentially stifling their leadership styles.

She says tackling this issue is not easy, but it is essential, and while the sector has grown its focus on promoting diversity and inclusion, further changes are required to address inequitable outcomes.

Bossard says Rangatira is committed to promoting diversity and inclusion at all levels of its portfolio companies, and discloses its efforts to achieve gender balance in its annual report.

By working together to promote diversity and inclusivity in the sector, Bossard believes a more equitable and thriving industry can be created that will benefit everyone.

Kate Le Quesne

Kate Le Quesne is the director of prudential policy at the Reserve Bank of New Zealand — Te Pūtea Matua. She leads the teams responsible for writing and reviewing the prudential rules that deposit takers, insurers and financial markets infrastructure must meet.

Le Quesne says she fell into financial markets “almost by accident”, having studied actuarial science. She became excited following the economic environment in real-time, which took her through a range of institutional banking roles in Australia, New Zealand and London.

More recently, she joined the public sector, where she found an array of roles that need specialist technical finance skills alongside a broad range of other skills — particularly good leadership.

She says she has been lucky in the Reserve Bank to have roles spanning both financial markets and financial stability, both critical areas to the functioning of our financial system.

Le Quesne was chairwoman of Young Women in Finance in Wellington for three years, which she says was a fantastic way to build a network with the shared goal of raising awareness around issues that matter to young women coming through the industry, to build support and awareness more broadly and to showcase some great role models.

She is keen to help mentor the next generation of leaders in the financial sector, acknowledging that in her own career, she has been lucky to have people who have been instrumental in helping her seek new opportunities and build confidence.

But she says it is still a challenge since there are fewer women in senior roles within the sector.

This means there are fewer role models and fewer of the benefits that come with a diverse set of leaders.

Le Quesne says the sector can drive change as it brings through the next generation, ensuring it puts unconscious bias aside to attract and retain a broader, more diverse workforce and ensuring organisations value diversity, inclusion and a range of skill sets, experience and backgrounds.

Project Auckland panel: Simon Bridges, Viv Beck & Mark Thomas

April 11, 2023

Project Auckland panel: Simon Bridges, Viv Beck & Mark Thomas

NZ Herald’s Tim McCready leads Heart of the City CEO, Viv Beck, Auckland Chamber CEO, Simon Bridges and Committee for Auckland Director, Mark Thomas in a discussion on the pain points plaguing Auckland’s infrastructure.

Project Auckland: Lessons come flooding in from three Auckland councillors

April 11, 2023

Project Auckland: Lessons come flooding in from three Auckland councillors

Tim McCready asks three Auckland councillors what they have learnt after recent floods.

Desley Simpson — Deputy mayor and Ōrākei councillor

Desley Simpson became the public face of the crisis when she stepped forward to support mayor Wayne Brown by providing emergency updates and responding to media queries.

The Ōrākei councillor, who is a clear communicator, reassured Aucklanders that a coordinated response was in place — although she acknowledges getting the information together in time for briefings wasn’t always easy.

“I was trying to bring multiple pieces of information together,” Simpson says. “What I found the most challenging was that I became the public face of what was going on, and there wasn’t one source of truth.

“It was Auckland Transport, Watercare, planning staff. I had to go to multiple sources to find out bits of information. That shouldn’t happen, we need to be better prepared for all eventualities.”

Simpson says we need to rethink how we understand and manage risk in New Zealand. “It is very easy to be reactive with short-term thinking. We have got to look at dealing with investment into resilience much better.

“It is going to be expensive, and it is often difficult to do.”

Meteorological services were forecasting heavy rain in Auckland in advance of the flood. But they said the record rainfall couldn’t have been predicted.

Simpson says though this is the case, managing risk and resilience can help New Zealanders prepare for a range of possible consequences. “If we can prepare that something will go wrong at some stage, then we can prepare for that eventuality.

“If as a society we had been thinking this way, then perhaps our infrastructure deficit wouldn’t be what it is, and we might have better considered the cost of infill housing on our stormwater infrastructure,” she observes. “We probably would have had a second harbour crossing a long time ago and plans for climate change and managed retreat would be well advanced.”

Simpson says there are a lot of LIMs (land information management reports) in Auckland that show a risk of flooding. But planners have not been inhibited from increasing housing density, even though the risk shows the density sometimes exceeds infrastructure capacity.

“I think there is a real risk around that, and from my personal perspective, I’d like to put a stake in the ground and say ‘hold on — let’s stop’.” She suggests a “digital twin city” model could be a possible solution to help with future planning. This is where a digital computer model of a city simulates how urban upgrades would impact water flows, traffic and provide other intelligent feedback.

Because everyone shares the same data, a digital twin city would also allow service providers to share data and ensure that work is co-ordinated.

Josephine Bartley — Councillor for Maungakiekie-Tāmaki

During the devastating floods, Josephine Bartley realised the severity when she was inundated by messages on social media from community members whose homes were being filled with water, and who had no idea what to do or where to go.

“I was being sent videos of people swimming in the street, and even though they only know me through Facebook, they thought I might be someone who could help them.

“They were scared, and I was scared. But I was trying to be strong for them, to give them direction to get out of their homes.”

The second term councillor for Maungakiekie-Tamaki quickly emerged as a powerful voice — not just for her own ward, but for other parts of Auckland — particularly those with a high proportion of Pasifika residents.

She says that while south Auckland residents were poorly supported by official channels and in some cases couldn’t be reached by emergency services, communities came together to help one another.

Bartley went to the Māngere evacuation centre, set up under the leadership of Manukau Councillor Alf Filipaina and the local board.

“We worked with what we had. The community came together to help each other and that is what made all the difference. I shared a video from the venue on social media and the community contacted me and came through. Even the local psychologist joined us to spend time with the traumatised families.”

To be better prepared for future events, Bartley emphasises the need to improve local plans and make them more accessible to the community.

“People need to have in the back of their heads: ‘if this happens, we go here’. We have to get to the stage where people don’t rely on emergency services but will be ready to help their own family immediately.”

She points out that Civil Defence and bureaucracies often fail to understand the unique needs of specific communities. Providing an empty building as an evacuation centre is not enough and doesn’t account for the different cultural and social requirements that are needed in the community.

Bartley’s leadership caught the attention of international media. While still based at evacuation centres, Bartley spoke with international outlets Fox News, BBC World News, Pacific Media Network and others, sharing updates on the emergency situation in Auckland and insights into the ongoing community efforts.

Julie Fairey — Councillor for Albert-Eden-Puketāpapa

During the floods, Julie Fairey was unable to leave her house — she had three children at home and a broken arm which made driving and lifting things impossible.

But as one of the two representatives for Albert-Eden-Puketāpapa, Fairey still had an active role in flood response work.

“I was completely useless outside,” she says. “So I worked to get better communication out to the community, because particularly in the first week, council unfortunately didn’t do a great job.”

Her role became keeping Aucklanders informed of the evolving situation through her social media channels, answering frequently asked questions and logging jobs that came in from residents into the relevant system so they could be addressed.

“I ended up triaging but also directing welfare requests to the local MPs’ teams. A lot of them had people out door-knocking on the ground — it’s something they’re good at. They turned that around into checking on people and going through the areas where people had been worst hit.”

The Albert-Eden-Puketāpapa ward is one of the most diverse in Auckland, covering an area that includes Mt Eden, Greenlane and Epsom across to Waterview, Mt Roskill and Lynfield. She says there was a big difference between parts of the community where people didn’t have a lot of access to resources and the parts where people were quite capable to get on the phone to their insurance and escalate things through council to get the help they needed.

“A lot of our response was about how we direct resources. Councillors Josephine Bartley and Angela Dalton got in touch several times to say they had some resources they could share, or to connect people up with relevant community groups on the ground that could check on people or provide supplies or emergency accommodation.”

To improve the council’s preparedness for future events, Fairey stresses the importance of improving its emergency management communications. “That was apparent on the day of the event, but also after.”

She says the council’s communication system with elected members during the Covid pandemic was a good example of effective communication. This provided regular updates with critical information, ensuring everyone was kept informed and that communications were aligned.

“After the floods it took too long for that system to reactivate,” Fairey says. “It is widely acknowledged that we should have that ready to go — maybe not right away when we don’t know how severe things are — but within the first 24 hours.”

Fairey says the flooding demonstrated elected members can be a great asset to get information out to residents. “But we can only tell people what we know.

“After a couple of days there was an acknowledgement that we were not in the way, but we were a very useful communications channel.”

‘Big Auckland Fix Up’ under way

A comprehensive emergency recovery plan to help rebuild the region and better prepare Aucklanders for future weather events is under way.

“It’s been more than a month since our region was hit by a horrible one-two punch – the Auckland Anniversary floods and then Cyclone Gabrielle and we still have a lot to do to help our hardest-hit communities,” said Auckland mayor Wayne Brown, who has labelled the plan the Big Auckland Fix Up.

Brown has asked Auckland Council CEO Jim Stabback to initiate a rapid assessment of flood risk areas to identify simple fixes and then carry out the necessary programme of work in consultation with Watercare and Auckland Transport.

He’s also tasked local boards to identify five main trouble spots and fixes in their area.

Brown then plans to visit these sites with relevant engineers to progress work. The mayor has identified several simple fixes to reduce flooding risks:

1. Clear streams and open drain channels on public and private land.

2. Lower non-arterial roads over constricted drains and waterways.

3. Build and improve turn-offs to utilise public stormwater storage in public parks and other areas.

4. “Daylight” streams in places where they are enclosed in pipes or narrow paths to create floodplains and reduce flooding of residential areas.

Brown says it’s obvious that Auckland must get better prepared for severe weather events and needs to rebuild local capabilities and response plans that have fallen into disrepair over the last six years and look at how we forecast and model flooding so we can provide better intelligence to the public.

“We need to restore and rebuild our broken roads, bridges, water system and buildings in a way that will make communities stronger and more resilient, and we need to address land use planning and building regulations.

“Recent events exposed problems in where and how some houses have been built in Auckland. In some cases, the government or courts have constrained council’s ability to regulate, and this will need to be addressed. The council must be able to say no and plan for infrastructure, as managed retreat is a last resort option.”

Project Auckland: Cyclone and flood deluge brings ‘a wake-up call’

April 11, 2023

Project Auckland: Cyclone and flood deluge brings ‘a wake-up call’

Auckland Councillor Richard Hills says the recent Auckland floods and cyclone have been a big wake-up call for politicians and communities to reduce emissions and adapt to climate change.

Hills discount those who say climate change is already here and we should solely focus on adaptation.

“This is a one-degree world. If we add two or three degrees onto this, we will face catastrophe.”

The third-term councillor chairs Auckland Council’s planning, environment and parks committee.

He put an extraordinary item on the committee’s agenda in early February to commission work into the implications of the flooding on Auckland’s land use planning, regulatory, infrastructure and other policy settings.

“While we’re talking about a one in 200- or 250-year flooding event — or a half a per cent chance of this happening in any given year — we know from Te Tāruke-ā-Tāwhiri: Auckland’s Climate Plan that we need to adapt and be more resilient because this is going to happen more often,” says Hills.

“When I led that plan in 2020, it was considered 10-20 years away but unfortunately it is here now. We had a two-year drought followed by the wettest winter, wettest summer, wettest January, wettest day. As well as that, the last eight years have been eight of our hottest ever.”

The planning review will consider what measures were effective in preventing and mitigating the impact of the floods.

Hills says this is important to avoid knee-jerk decisions which tar all forms of intensification.

He points to the Te Ara Awataha greenway in Northcote as an exemplary development where underground pipes were resurfaced to follow the path of the original Awataha Stream. Sections of the stream were opened and replanted in a process called daylighting that rejuvenates buried urban streams.

“We could only do that because Eke Panuku, Healthy Waters and Kāinga Ora all worked together,” says Hills. “They demolished the homes in that area of Northcote so we could re-channel everything — and it didn’t flood. We don’t have that luxury in every community but it shows what happens when we do intensification well with the right infrastructure alongside it.”

Hobsonville and Stonefields fared well during the flood compared to some of the worst hit more established suburbs of Mt Eden and Mt Albert.

“Our biggest emissions come from transport, so it will be important to act there. But the flooding has raised questions about where any future rail or light rail to the North Shore would go,” says Hills.”

During the January 27 event, major sections of Auckland’s motorways were flooded or closed. On the Northern Motorway, people were trapped in cars that were floating along rising floodwaters.

“Is the busway the best place to put rail? Or is it better to be higher,” he questions. “We need to think about everything — not just because the infrastructure might flood, but also will people be living in low-lying areas in the future?

“If we think that people will ultimately move away from those areas, then we need to plan ahead for that.”

Crisis response

Hills was in the thick of it during the January 27 flooding. He used his social media channels to implore residents to stay out of floodwaters and check on their neighbours, share information about evacuation centres, and remind people to stay prepared by filling water bottles and charging their phones.

Hills is one of the most-followed councillors on social media. He spoke with Tātaki Auckland Unlimited early about cancelling the Elton John concert when it was obvious Auckland was facing a severe weather event. The promoters didn’t cancel the concert until shortly before the superstar was due to take to the stage at 7pm, stranding thousands of people at Mount Smart Stadium. Hills’ focus then turned to Auckland Transport, requesting they mobilise all available buses to get people home.

“It was all pretty chaotic and upsetting,” he says. “People were contacting me, ringing me, and sending social media messages. In that kind of chaos, people just need any information so if I could help that is what I was trying to do.”

Over the weekend that followed, it was obvious to Hills that flood-damaged property needed to be urgently dealt with.

“Council’s advice was that insurance needed to deal with rubbish, but if we waited on that then we would have a major health crisis. In some roads in Milford and Sunnynook, there were entire households worth of waste piled up on the berm. We were worried about more rain events coming and debris floating away.”

Hills organised the first public rubbish skips in concert with the local board.

In the days that followed, he took mayor Wayne Brown to the North Shore to see damaged houses before later meeting with Prime Minister Chris Hipkins, Auckland Minister Michael Wood and Auckland Central MP Chlöe Swarbrick.

Project Auckland: Opportunity costs lie in flood and cyclone response

April 11, 2023

Project Auckland: Opportunity costs lie in flood and cyclone response

The recent weather events that battered Auckland have left the city with significant damage to public and private assets, including infrastructure, land, houses and businesses which will take a lot of work to put right.

Auckland Council chief economist Gary Blick says the city is worse off and while there will be a bump in activity to put the damage right, it will not necessarily mean Auckland is further ahead, with funding and capacity constraints leading to other projects – and their benefits – being deferred.

“Economists think about the opportunity cost,” he says. “What are we forgoing by having to turn our limited resources – labour, capital, equipment – into putting things back.”

As chief economist, Blick is focused on the medium to long-term implications of decisions that are made by the council. His approach to economics is broad, considering trade-offs in resource use as well as the wellbeing of the community.

Recent events have revealed the need for the city to consider its policies for managing future natural disasters and climate change and have focused policy debate on Auckland’s resilience.

Blick says it is important to be quite considered and have a good evidence base around causality and impacts.

“If we are going to take a policy action, we have got to consider all of the impacts on our resources and the associated trade-offs,” he says. “As an example, adapting to the changing climate and natural hazard risk in a way that doesn’t undermine our other objectives such as accommodating growth, enabling more housing, and reducing transport emissions. And we want to respond in a way that is consistent with financial sustainability and the prudent use of public funds.”

Given the evidence of how natural disasters can impact on mental health, Blick has been reflecting on the potential impact of weather damage on the wellbeing of Aucklanders. “Particularly for younger people, and the disruption it can have on their home life and their engagement with education, training and employment pathways. We are trying to get a good evidence base around that in terms of characteristics of affected households and their potential vulnerabilities.”

Blick is particularly interested in Auckland’s ability to accommodate growth, and its long-term competitiveness and attractiveness to current and prospective residents. With this in mind, he is closely watching Plan Change 78 – the council’s response to the Government’s National Policy Statement on Urban Development – which is now before an independent hearings panel. The initiative was created from a cross-party law in late 2021 when National and Labour collaborated to bring about significant modifications to the existing plans for major urban areas, leading to big changes to the Auckland Unitary Plan.

Some of these include requiring the council to enable buildings of six storeys or more within walking distance of the city centre, large metropolitan centres and around rapid transit stops. It also enables three-storey housing to be built on most residential sites in urban Auckland.

In the aftermath of the January floods, some councillors have expressed concerns about the impact of new housing density laws, fearing multi-storey residential buildings could further strain the already-overburdened infrastructure.

Blick acknowledges the weather events have highlighted challenges that will need to be addressed in policy settings on land use and infrastructure investments. He notes these are discussions many international cities are grappling with, particularly in coastal or flood-prone areas.

Such decisions can have significant and far-reaching consequences for Auckland’s growth patterns. It is Blick’s responsibility as the city’s chief economist to consider and advise on the full range of consequences.

Land use policy and transport infrastructure investment are big, powerful levers for a city’s attractiveness, Blick observes. They influence where households can locate, the accessibility of different locations, and the decision-making of people in New Zealand and overseas who are considering relocating.

“More flexible land use gives households more choice, and the option to locate in locations that are in relatively high demand due to their proximity to jobs, transport links and other urban amenities.”

Enabling more people to locate closer to the things they value is positive for wellbeing and productivity and improves Auckland’s competitiveness in comparison to other cities and regions.

The Auckland Unitary Plan shows the power of changes in land use policy. Upon its implementation in 2016, it increased Auckland’s capacity to accommodate growth and allowed land in some locations to be used more intensively.

Research conducted by the University of Auckland has analysed the impact of the Unitary Plan by modelling the counterfactual if it hadn’t been introduced. The study found that over the first five years, the Unitary Plan led to the construction of an additional 26,900 dwellings, 50 per cent more than otherwise.

“This really shows how powerful land use policy can be, and so potential changes need to be carefully considered,” Blick says. “People may notice changes in some neighbourhoods and some people may not feel entirely comfortable about it.

“But we also need to consider where we’d be without those extra homes and where those households would otherwise locate. Enabling the market to deliver more homes in response to the demand has been a positive step for improving housing affordability over the medium term.”

Looking ahead, this will help Auckland retain its competitive advantages. “Auckland still offers a diverse range of employment opportunities, specialised roles, higher income prospects, urban amenities and consumption possibilities not available in other regions,” Blick says.

Project Auckland: International cities show how to soak up stormwater

April 11, 2023

Project Auckland: International cities show how to soak up stormwater

In 2015, China implemented a concept known as “sponge cities” in 16 urban areas to combat flooding caused by stormwater.

The initiative was in response to the devastating Beijing flood in 2012, which claimed 79 lives and prompted authorities to make sponge cities a nationwide policy.

The idea was promoted by Chinese landscape architect Yu Kongjian, who advocated for the integration of nature’s ability to absorb, store and filter water into city infrastructure to mitigate against runoff.

This approach involves using green infrastructure to allow water to follow its natural channels, with streams and creeks uncovered, parks and grasslands restored, and planting used to slow down the flow of water and enable natural absorption, infiltration and purification. This is in stark contrast to the conventional grey infrastructure solution that speeds up the flow of water using pipes and drains.

Qunli stormwater park, in the northern Chinese city of Harbin, is an example of the concept. The park collects, filters and stores stormwater, and has become a popular urban amenity for recreational use. Capable of retaining and filtering up to 500,000 cubic metres of stormwater, the park has solved the stormwater inundation issue for an area 10 times its size, spanning over three kilometres.

The success of the initial pilot has seen a further 14 cities in China adopt the idea of sponge cities, including Shanghai, Shenzhen and Beijing, and has seen the concept grow in interest in other international cities.

In Auckland, the concept of sponge cities has also been put into practice. One example is Stonefields, with its large tiered floodable park, created by preserving some of the existing wetlands and preventing floodwaters from flowing into properties during heavy rainfall.

Another example is Te Auaunga Oakley Creek, a Healthy Waters project in Mt Roskill.

Te Auaunga is one of Auckland’s longest urban streams, winding its way from Hillsborough through Mt Roskill, Owairaka and Waterview to the Waitematā Harbour. The creek has breached its banks during heavy rainfall, but that is part of its design — the connected parks collect excess stormwater and slowly release it back into the creek, preventing flooding for nearly 200 homes.

New York’s pocket rain gardens

On a smaller scale, New York City has implemented pocket rain gardens to help manage its stormwater. These tiny gardens help with the natural absorption of rainwater into the ground instead of allowing it to flow into the sewer system. Strategically located, the pocket rain gardens are installed in areas where their impact on the health of the city’s waterways will be most significant.

Thorough soil testing is conducted before installation to ensure the pocket gardens can efficiently absorb stormwater. The area is then excavated to a depth of around five feet (1.5m) and backfilled with stone and soil, with the kerb replaced with one that allows water to flow in and out. Appropriate plants, flowers and trees are then selected and planted in the area.

The benefits go beyond stormwater management. They help to combat the urban heat island effect, clean the air, promote biodiversity and beautify neighbourhoods.

Tokyo’s underground cathedral

Tokyo, a city built on a flood plain and crossed by five river systems and dozens of individual rivers, has taken a unique approach to risk mitigation. In 1992, construction of the Tokyo Metropolitan Area Outer Underground Discharge Channel began in the northern Saitama Prefecture on the outskirts of the city.

Over 14 years, the world’s largest underground floodwater diversion facility was built to counteract the overflowing of city rivers during intense rain and typhoon seasons. The system’s tunnels and chambers run for 6.3km east to west, featuring 18m-high concrete pillars that create a cathedral-like space underground.

Before it was constructed, the water level from rivers used to flood a large area. The facility is activated around seven times a year, and allows Tokyo to divert and store water in the underground channel, and pump it into the larger Edo River at a rate of up to 200 metric tonnes of water per second.

The facility proved its effectiveness during Typhoon Hagibis in 2019. The artificial caverns were able to take in more than 12 million cubic metres of water, saving Greater Tokyo from an estimated 26.4 billion yen ($330 million) in damage.

Rotterdam’s green rooftops

The Netherlands’ second-largest city, Rotterdam, is home to the DakAkker, a farm on top of a roof covering a massive 1000 square metres.

The roof holds a thriving garden filled with fruit trees, vegetables, flowers and herbs. Bees are kept and even chickens wander around. It is one of the largest rooftop farms in Europe, capable of collecting 60 litres of rainwater per square metre.

A portion of the farm’s roof has been transformed into a smart roof that can respond to heavy rainfall predictions.

The system can make extra water storage capacity in advance of a rainfall event by releasing water slowly up to 24 hours ahead of the rain, giving it the capacity to handle heavy downpours more effectively.

Over the past decade, Rotterdam has transformed rooftops across the city, with green roofs installed on thousands of buildings, covering about 330,000sq m, or around 2 per cent, of the city’s flat roof space. These green roofs are playing a crucial role in keeping water out of the city’s ageing stormwater system and preventing flooding.

Rotterdam residents can apply for subsidies to create these green roofs and install water retention systems. The smart technology being trialled on Dakakker’s smart roof could ultimately be expanded across the city, so water levels on rooftop storage tanks could be co-ordinated to empty when rain is forecast, allowing them to be fully operational during heavy rain events.

In 2013, Rotterdam built the Benthemplein “water plaza” with a similar goal. The plaza is sunken into the ground, with a sports area in the centre accessed by steps. During heavy rain, the plaza collects runoff and stores water to dissipate safely.

“Instead of making bigger sewer pipes, we chose to invest in redesigning public space in a way that contributes to a nicer, better, more attractive district,” says Arnoud Molenaar, Rotterdam’s chief resilience officer.

World’s spongiest cities

Engineering consultancy Arup released its Global Sponge Cities Snapshot in 2022, which examined the amount of green space and permeable soil in major cities. Auckland was ranked the spongiest city, given its lower urban density and high level of green space areas.

1 Auckland — 35%

2 Nairobi — 34%

3 Singapore — 30%

3 Mumbai — 30%

3 New York — 30%

3 Toronto — 30%

4 Montreal — 29%

5 Shanghai — 28%

6 London — 22%

7 Sydney — 18%

Reflections from Hong Kong (LinkedIn)

January 16, 2023

Asian Financial Forum: Optimism in Hong Kong despite economic outlook (NZ Herald)

January 14, 2023

Asian Financial Forum: Optimism in Hong Kong despite economic outlook (NZ Herald)

While the economy faces a challenging year, China’s reopening is a source of cautious positivity

Despite the International Monetary Fund’s (IMF) projected slowdown of growth this year to 2.7 per cent from 3.2 per cent in 2022 and its suggestion of an outlook fraught with uncertainty, the recent reopening of China resulted in an upbeat mood at the Asian Financial Forum (AFF) in Hong Kong this week.

The high-powered forum included keynote speeches from Helen Clark and former UN Secretary-General Ban Ki-moon, and brought together some 2000 delegates including politicians and policymakers, global financial and business leaders, investors and entrepreneurs from over 70 countries and regions. It was the first in-person gathering for the event after being held in a virtual format for the past two years.

Opening the Summit, Hong Kong’s chief executive John Lee acknowledged the global challenges but said the timing of the forum – just three days after resumption of quarantine-free travel to and from mainland China – provided a source of optimism.

Asian stocks traded higher following the resumption of quarantine-free travel and the end of China’s zero-Covid policy, and delegates shared this bullish view at the AFF.

When polled on expectations of the global economy in 2023, some 69 per cent said they were either optimistic or neutral. Just 31 per cent responded with a negative sentiment about the year ahead.

Chair of HSBC Holdings, Mark Tucker, said China’s reopening and the package of measures it is introducing to stabilise the weakened property market will be positive for both its own economy and the global economy more broadly, albeit with ongoing volatility and challenges associated with the escalation in Covid-19 cases.

“Hong Kong and the Greater Bay Area are likely to be the immediate beneficiaries from the mainland reopening,” said Tucker, expecting a strong recovery to be seen from the second quarter.

Even more significantly, it could potentially be the stimulus on which the global outlook for which 2023 depends on.

Tucker was enthusiastic that Asia was resilient, and had prospects for a strong rebound later in the year.

“We have seen virtually all economies in the region now recovered from the output losses incurred during the pandemic to above 2019 levels,” he said.

He highlighted that India too had become a hugely attractive market within Asia, with a strong long-term outlook, supported by the demographic dividend provided by having over two-thirds of its population of working age, along with important reforms and rapid developments in the digital economy coupled with global supply chain shifts.

“This could be the basis for a 20-30 year runway for growth, as was the case for China in the 1990s,” he said. “The same is still true of Singapore and across many Asean markets more generally.”

In contrast, he said a recession is widely expected in the United Kingdom and the EU with challenges from high inflation driven in part by higher energy prices and the war in Ukraine. Both are contributing to a cost-of-living crisis and squeeze on real incomes.

“The US economy is proving more resilient than those in Europe, and I don’t expect a hard landing,” he said. “I expect any US recession to be much shallower than those in Europe.”

“All of this means I am more optimistic about the second half of 2023. I expect inflation to slowly come under control. The markets are hoping that rates peak in the first half of the year so that any recession is shallow, regionally limited and resolved quickly.”

Chair of Agricultural Bank of China – one of China’s ‘big four’ banks – Gu Shu, shared this encouraging position, telling the forum the US is now facing lighter inflationary pressure, and inflation in the eurozone is expected to peak later this year.

“The need to continue raising interest rates weakens,” he said. “We estimate that in 2023, the pace of interest rate hikes will slow down.

“However, with rising food prices and a shortage in labour supply, the high current interest rates and tight monetary policy is likely to continue for some time.”

Navigating the polycrisis

The forum included a focus on how countries and financial institutions can tackle the looming polycrisis – a term coined to describe the multiple interrelated economic, political, and ecological shocks upending the global economy.

Panellists stressed it will be essential to work closely together to navigate the polycrisis, especially due to the many global issues that will need closer cooperation among countries to solve including the food, energy and cost of living crises, supply chains, climate change and the ongoing pandemic.

Luxembourg’s Finance Minister Yuriko Backes told the forum that while Covid tested the limits of globalisation and exposed several weaknesses, particularly in supply chains, the wrong conclusion for countries to draw from the crisis would be that we need a general decoupling from other economies.

“There is a worrying wider trend toward deglobalisation and protectionism in Europe and also elsewhere, and it is therefore important that efforts to increase autonomy do not translate into widespread market and technology fragmentation.”

Protectionism risk

Backes said there is a risk Europe’s open strategic autonomy, China’s dual circulation strategy which also aims to increase self-reliance, or the ‘Buy America’ rules introduced in the US could lead to a collective decoupling of markets and increased protectionism.

In Asia, multilateralism is on the rise. The world’s largest free trade deaL the Regional Comprehensive Economic Partnership (RCEP) between Asia-Pacific nations including New Zealand, has just reached its first anniversary in force and continues to grow to reach its full potential.

But Antony Leung, group chair of Hong Kong conglomerate Nan Fung Group, said the elephant in the room is the ongoing rivalry between the United States and China, which brings with it trade protectionism and puts wider global cooperation at risk.

“As a result, we are seeing that the world may be facing ‘one world, two systems’ – one being the US-European system, and then the rest of the world,” he said.

-Tim McCready was a guest of the Asian Financial Forum

Dynamic Business: Pandemic era lessons from the Big Apple

December 9, 2022

Taking part in Air New Zealand’s business delegation to New York on the new direct Auckland-New York City flight was a great opportunity to catch up on the United States economic environment, trading conditions, geopolitics and trends. As someone who hadn’t crossed the New Zealand border since 2020 (but pre-pandemic was a frequent long-haul traveller), it was also a chance to get a taste of travel in the Covid era.

More than 20 of NZ’s most influential business leaders joined the delegation, including the heads of Mercury Energy, NZ Beef & Lamb, Sanford, The Warehouse Group, SkyCity, Infratil, Spark, Beca, Ngai Tahu and the University of Auckland. Between the CEOs and directors on board NZ2, Air New Zealand was responsible for carrying a sizeable fraction of New Zealand’s Top 200 businesses.

These delegations are often predicated around government-to-government relations such as bilateral and multilateral meetings, or free trade agreements, but this trip was different.

Despite including Deputy PM and Finance Minister Grant Robertson and National deputy leader and finance spokesperson Nicola Willis as part of the delegation, one of the distinct things about the trip was that it wasn’t politically focused.

Air New Zealand chair Dame Therese Walsh described the visit as a chance to not only showcase the airline’s new flagship route, but to “get back to doing what Air NZ used to do – be an important part of NZ Inc thinking and New Zealand’s economic development.”

Air NZ CEO Greg Foran’s status in the US was evident (he was previously CEO and president of retail giant Walmart US). He used his cachet to pull in high-profile speakers including Indra Nooyi – the former chair and CEO of PepsiCo and often touted as one of the world’s most influential women.

Though meetings were held under the Chatham House Rule, some of the lessons that stood out from three days on the ground in the Big Apple include:

From New Zealand to New York the challenges remain the same

The mood in many meetings was sombre, as the US grapples with many of the same economic headwinds as New Zealand. A looming recession, geopolitical tensions, constrained supply chains, a shortage of talent, burgeoning inflation and interest rate rises are creating uncertainty.

While Covid restrictions have all but gone in New York, the pandemic has left a permanent mark on the city. Companies in the US have embraced hybrid working which is considered “here to stay” as employees demand the flexibility that comes with it.

Covid testing sites are still scattered about, and despite no requirement for face masks, their use seemed far more common than in Auckland on public transport and in public spaces.

ESG under strain – but ignore it at your peril

The acronym ESG – which takes into account a business’s efforts on environmental factors, social issues and corporate governance – has risen to prominence over the past few years. But recently it has become politicised in parts of the US. Its association with liberalism has seen a backlash among some Republican officials who have described ESG policies as ‘woke’.

Acronym politics aside, there was a lot of talk in New York that US investors, customers and employees are continuing to focus on whether businesses are authentic about their purpose and leadership, and whether they are doing what they say they are doing when it comes to society and the environment.

This is more important than ever as Gen Z (those born between the late 1990s and early 2010s) become more prominent in the workforce. Many are choosing not to engage with businesses or even apply for jobs with employers that have a perceived negative impact on the environment, or an organisation that lacks diversity. If a business can explain why its activities are important not just for commercial differentiation but also for the planet and society, it will be a valuable competitive differentiator.

America doesn’t have time for short poppies!

Kirsten and Craig Nevill-Manning, former Facebook and Google executives who are among our most successful offshore New Zealanders, hosted a reception for the delegation at their spectacular multi-level Brooklyn apartment complete with a stainless-steel slide to traverse the floors.

There, a panel of New York-based Kiwis spoke about the many New Zealand businesses that are doing great things in the US – but stressed that we continue to be too demure for an American audience. To get cut-through in a crowded market that moves quickly, businesses must be prepared to share their unique points of difference and accomplishments as loudly as their competitors do.

The expat community in New York is small but tight-knit. Those that we met on the ground are keen to welcome more to the city and pass on their deep experience and advice to others so that New Zealand businesses can hit Manhattan running and make their mark on the city that never sleeps.

Good news for tourism and business

Despite being closed to visitors for two years, New Zealand continues to have a lot of friends offshore. Everyone who spoke to the delegation had fond things to say about our country and those who have not yet been innately like us and have a desire to visit – even if they couldn’t pinpoint exactly why.

There was an expectation from business delegates and those we spoke to that the direct flight between Auckland and New York will have a role in shaping how NZ’s economy and future opportunities evolve.

One US-based investor likened New York to a “multiverse” since there is so much going on in such a diverse city. He said the need to transit when travelling from the east coast of the US to New Zealand previously put a lot of people off coming to Aotearoa, and the air link will now “connect Middle-earth with the multiverse”, bringing immense opportunity along with greater capital, entrepreneurship, and talent.

Tim McCready was a guest of Air New Zealand on the direct flight to New York.